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Company Profile

The results, detailed in the Morgan Stanley Australian Shopping Centre Handbook, showed that each of the listed retail landlords had some strong shopping centres but also others with limited growth prospects.

Westfield
Group and
Westfield Retail Trust
had the best mix of assets with only 2 per cent of their malls considered weak, Morgan Stanley found.

GPT
Group’s portfolio also ranked highly. More than one-third of its centres were dominant in their trade areas, but the analysts said some assets were in low-growth markets, including Charlestown Square in NSW, which has recently been redeveloped.

Of CFS Retail’s malls, 63 per cent were considered strong – including Australia’s top shopping centre, Chadstone Mall in Melbourne. But nine of its centres were weak, in Morgan Stanley’s view, which dragged on the portfolio.

Centro Retail Australia
had recently bought some weak assets from its funds, which the analysts were watching. Tenants in many of its centres were not strong, so changing the tenant mix could improve results.

Like Centro’s portfolio,
Stockland
’s and
Mirvac
Group’s portfolios were considered to be of mixed quality.

The analysts said several of Stockland’s centres, including those under redevelopment, would improve while others were of poor quality and could be divested. Excluding the weak centres, almost half of Stockland’s centres dominated in their trade areas.

Mirvac’s Broadway in Sydney is its one strong asset. Others in its portfolio had growth potential in areas of above-average income levels, Morgan Stanley said.

Charter Hall Retail REIT
’s centres were dominant in their trade areas, but low barriers to entry by competitors and low household income or trade area growth meant it had rated poorly in the analysts’ assessment.